As the hemp industry becomes saturated with growers and processers looking to get an edge on the CBD consumer market, some in Italy’s hemp space are borrowing a concept from French wine to set themselves apart.

A London-based cannabis investment company focused on investing in or buying companies operating in the CBD wellness and medicinal cannabis industries, has made its first investment in the hemp and CBD space.

Last Thursday, Hilary Bricken, Griffen Thorne, and I put on a free webinar to answer all your California cannabis questions and while we did our best, we ran out of time to answer all of the excellent questions that were posed by attendees.

One of the questions that was posed–and we get this question all the time from clients and potential clients looking to enter the California market–was whether we knew of any cities or counties that are currently open for licensing (particularly retail), or whether we knew of any cities or counties currently under a ban on commercial cannabis activity that will be opening up for licensing in the imminent future. Coincidentally, Marijuana Business Daily released a perfectly-timed rundown of some of the local jurisdictions in California that may be welcoming cannabis businesses in the near future.

Currently, approximately 2/3 of the local jurisdictions in California have instituted local bans of varying degrees on commercial cannabis activity. Lack of access to safe and legal cannabis to this degree does little to undermine the existing black market, and we’re hopeful that the financial incentives, at the very least, will entice many local governments to rethink their current policies. According to Marijuana Business Daily’s rundown, below are some of the local jurisdictions that may do just that.

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Current city regulations prohibit the sale, commercial cultivation, and processing of both adult-use and medicinal cannabis. The Anaheim City Council has taken interest in changing the ordinance and putting the issue to voters and at their meeting scheduled for June 9th, “is set to consider approval of the first and second steps in a three-step process toward legalizing, taxing and regulating commercial cannabis distribution, manufacturing, cultivation, retail sales, deliveries and testing laboratories.” The proposed ordinance would limit permits for cannabis retailers, cultivators, manufacturers, and distributors to 20 in each category.

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Commercial cannabis activity in Chico is currently prohibited, and an ordinance introduced and given pre-approval by the City Council in February would allow for commercial cannabis activity (with the exception of cultivation and microbusinesses). The ordinance would allow up to four retail stores, and would not cap manufacturing, distribution, or testing lab licenses.

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The city amended its cannabis ordinance on May 26th, and will begin offering the following license types, with limits, on a first-come first-served basis as of June 25, 2020: manufacturing, distribution, testing laboratories, and microbusinesses.

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The City Council adopted an ordinance on April 6th that will regulate certain commercial cannabis activities, including storefront retail, delivery, cultivation (indoor), non-volatile manufacturing, processing, distribution, microbusinesses, and testing labs.

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Licensing for retail, cultivation, distribution, manufacturing, and testing labs is currently open through June 15th, and storefront retail licenses will be capped at six.

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City Council voted in January to authorize at least 14 retail storefronts, which could be increased to 21.

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On February 25th the City Council adopted an ordinance to allow for a maximum of two cannabis storefront retail dispensaries. The deadline for submitting applications is July 9, 2020.

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Licensing is ongoing, but future licensing rounds have yet to be announced. Licensing in LA has been riddled with issues, as we have written about

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On May 18th, the City Council adopted an ordinance that will allow for three retailers, as well as other commercial cannabis business types, although the language of the ordinance is somewhat unclear. Microbusinesses, cultivators, manufacturers, distributors, and labs seem to be allowed.

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In January, the city indicated that it was considering adding another ten storefront retail permits, although there are currently no concrete details.

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Although the process is currently on hold due to Covid-19, county supervisors approved up to six storefront retail licenses.

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The city will allow up to four storefront retail permits, and will not cap other license types. The licensing process has yet to begin, and no formal timeline has been established.

On the flip side, Kern County voters recently rejected two initiatives that would have allowed for commercial cannabis activity, which is currently banned. We’ve heard much hopeful speculation that as cities and counties recognize the potential benefits (particularly financial benefits in light of the current economic crisis and the state’s designation of cannabis as “essential”) of opening their doors to commercial cannabis activity, more licensing opportunities will become available for investors. And we’re hopeful that speculation turns out to be accurate.

State agriculture officials in Kentucky on Friday released production data from the 2019 season and revealed the number of licensed growers, hemp processors and handlers as well as licensed indoor and outdoor production acreage for the 2020 season.

The Agriculture Improvement Act of 2018 (2018 Farm Bill) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (CSA) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (USDA) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA.

This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp. Our attorneys track these developments in real-time on behalf of multiple clients, and we provide those clients with a 50-state matrix showing how states regulate hemp and hemp products. Today we turn to Washington State.

The Washington State Department of Agriculture (WSDA) regulates the production of hemp under the 2018 Farm Bill. The state’s hemp plan was approved by the USDA in January 2020. We wrote about Washington’s hemp plan when it was proposed back in November 2019 so if you’d like to really dig into it, you can do that here. Overall, Washington’s hemp cultivation regulations are fairly standard though there are a few notable and unique provisions. For one, the WSDA requires that hemp producers ensure that Washington-grown hemp is accompanied by a certification form showing that it contains no more than legally allowed amount of total THC and by a copy of the producer’s license. For hemp plant material that was grown elsewhere, the WSDA requires a bill of lading or other documentation demonstrating that the hemp was legally imported into Washington and is legally present in the state.

Another interesting quirk of Washington’s hemp law is contained in RCW 15.140.040 (5), which reads as follows:

The whole hemp plant may be used as food. The [WSDA] shall regulate the processing of hemp for food products, that are allowable under federal law, in the same manner as other food processing under chapters 15.130 [(Washington’s Food Safety and Security Act)] and 69.07 RCW [(Washington Food Processing Act)] and may adopt rules as necessary to properly regulate the processing of hemp for food products including, but not limited to, establishing standards for creating hemp extracts used for food.

This means that under Washington law, any part of the hemp plant may be used as food and the WSDA may regulate the processing of hemp into extracts like Hemp CBD. But these hemp products have to be “allowable under federal law” which makes things complicated given that the FDA has consistently stated that it is illegal to sell Hemp CBD as a food or dietary supplement. The WSDA’s hemp FAQs take this legal framework into account in answering “What CBD Products From Hemp Are Allowed?”

The federal Food and Drug Administration (FDA) and WSDA do not permit CBD to be added to food and beverages or sold as a dietary supplement. The FDA is the overall authority for CBD products derived from Hemp. CBD products like tinctures, lotions, and topicals are allowed. Please view the WSDA Food Safety notice at the following link: https://agr.wa.gov/departments/food-safety/food-safety/hemp-cbd-in-food

This all means that currently Washington does not allow for the sale of Hemp CBD in food or dietary supplements. But that could change as soon as the FDA’s position changes, given that Washington law allows the WSDA to regulate the processing of hemp into food and extracts like Hemp CBD.

Turning to other Hemp CBD products, Washington law explicitly permits the sale of “cannabis health and beauty aids” which are “product[s] containing parts of the cannabis plant” that are intended for topical use, cannot pass the blood-brain barrier, contain less than 0.3% THC and are not intended for ingestion. RCW 69.50.575. This covers Hemp CBD cosmetics. Hemp CBD vapor products, on the other hand, are explicitly prohibited. RCW 70.234.030.

Washington was one of the first two states to legalize recreational marijuana, making it a very early adapter. The state has not taken a similarly bold approach to Hemp CBD as the sale of any Hemp CBD product other than cosmetics comes with significant legal risk.

We’ll continue to monitor all things hemp in Washington and elsewhere. For previous coverage in this series, check out the links below:

Every Thursday, international attorneys Fred Rocafort and Jonathan Bench discuss legal and economic developments around the world with the help of their international guests. No topic is too big, too small, too simple, or too complicated. They cover continents, countries, regimes, governance, finances, legal developments and whatever is trending in global law and business.

Both Jonathan and Fred are both accomplished international cannabis lawyers in addition to everything else that they do. In Episode #7, we are joined from Montevideo by attorney Dr. Rodolfo Perdomo, of Perdomo Abogados, to discuss Uruguay’s cannabis industry. We cover:

Former President José “Pepe” Mujica’s critical role in making Uruguay the first country in the world to legalize recreational cannabis.

The current legal framework for cannabis in Uruguay—and why there is no going back for the country when it comes to cannabis.

Uruguay’s aspirations to become a world hub for cannabis research and production, and its new related legislation.

Why Uruguay is a welcoming and attractive destination for foreign investors, and not just those in the cannabis sector.

At least one important thing you should know about Uruguay, aside from cannabis! (Hint: 1930 and 1950).

If you’d like to tune in to future episodes, they air each Thursday. Next week will feature another discussion on the global business environment, this time with guest David Baxter. The topic will be public–private partnerships (PPP) worldwide.

Since the beginning of March, federal food and drug regulators have issued warning letters to 64 companies for selling products under claims that they will prevent, treat, mitigate diagnose or cure COVID-19, including eight to CBD companies.

International cannabis giant Canopy Growth Corp. remains bullish on the U.S. CBD market, even as the company reported an eye-popping net loss of 1.3 billion Canadian dollars ($944 million) last quarter.

A U.S. territory and four American Indian tribes have received approval from the U.S. Department of Agriculture for their 2020 hemp production plans, just as hemp planting season is about to officially begin across most of the country.